Vodafone has reopened talks to boost its 50 per cent stake in Vodacom, the South African mobile operator, as competition in the region looks set to heat up.

The world's largest mobile phone company by revenue has long coveted control of Vodacom, which it jointly owns with Telkom, South Africa's dominant telecoms operator. The renewed effort comes six months after the original negotiations to enlarge its holding collapsed.

It emerged yesterday that Vodafone had approached Telkom and offered 18.75 billion rands (£1.24 billion) for a further 12.5 per cent stake. Vodafone has made clear that it would continue to chase a majority share in Vodacom, which has operations in South Africa, Mozambique, Lesotho and Tanzania, ever since Telkom called off talks at the end of November.

With a merger on the cards between MTN, sub-Saharan Africa's biggest mobile phone operator, and Reliance Communications, of India, which could create a $66 billion (£33.5 billion) emerging markets telecoms giant, the urgency for Vodafone for a deal has intensified.

Vodafone confirmed that talks with Telkom were under way but said it did not mean a deal would be struck.

Meanwhile, Vodafone may be able to increase its 3.3 per cent stake in China Mobile after a restructuring of the country's telecoms industry. The government-mandated reshuffle calls on China's six telecoms companies to combine to form three groups to boost competition and prevent one company dominating the market.

The reorganisation is expected to open the door to foreign investors, who, until now, have been restricted to taking limited stakes in Chinese telecoms companies. Last month China Mobile was granted permission to begin offering fixed-line services.

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